Ho Chi Minh, Thursday April 3th 2014, joining the other 250 offices of Cushman & Wakefield around the world, Cushman & Wakefield Vietnam launched it Q1 2014 office market report. Sharing the common goal with Cushman & Wakefield Global, Cushman and Wakefield Vietnam has been proactive in collecting market data to produce a report covering a detailed price trend analysis, supply-demand perspective as well as capturing the market sentiment and movement. According to the report, the Vietnam office for lease sector is forecasted to stabilize in Ho Chi Minh City in the short term, with Hanoi expected to see some further price decreases.
Ho Chi Minh city witnessed no change in a supply during Q1 2014. Grade A rents continued its downward trend, decreasing by some 1% quarter-on-quarter (q-o-q), and by nearly 5% year-on-year(y-o-y) but are expected to stabilize going forward. Grade B rents remained stable quarter-on-quarter but decreasing by around 4% y-o-y. In first quarter 2014, grade A segment enjoyed an increase in occupancy rate by 3% compared to the last quarter. Meanwhile, occupancy of grade B remained unchanged q-o-q.
Hanoi, on the other hand, welcomed a number of 12% grade B office space increase during Q1 2014. Specifically, five projects namely Eurowindow, Multi-complex, Times City, Song Hong Parkview, Gelex Building, and PV Oil Building have officially come online, raising the total of grade B supply to roughly 723,000 sq.m.. Due to the higher than average asking rent of these new projects, grade B witnessed a slight increase of 1.6% in average asking rent q-o-q. For grade A, whose stock stays the same as the last quarter, the average asking rent continued on its downward trend with a 3.5% decrease over the quarter. Compared to the previous quarter, grade A and grade B office occupancy rate in Hanoi declined by 1.2% q-o-q, and 0.3% q-o-q.
The boisterous start to Ho Chi Minh office for lease in 2014 continues into the second quarter, with C&W active with good leasing activity and ongoing enquiries. C&W is also delighted to announce the leasing of 2,500 sq.m. in Bitexco Financial Tower, acting on behalf of GroupM, taking building occupancy to almost 90% and helping market occupancy nudge above 90%, the highest level for almost four years.
However, while Ho Chi Minh City is expecting 160,000 sq.m. of office space coming online in the short term, more than 800,000 sq.m. of office space across all grades is forecast to come onto the Hanoi office market during the next two years, suggesting Hanoi will remain a tenants market for the foreseeable future.
Download full report here